WORKERS REHABILITATION AND COMPENSATION (EMPLOYER PAYMENTS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 10 November 2011.)

The Hon. R.I. LUCAS (17:37): In rising to speak to the second reading of the Workers Rehabilitation and Compensation (Employer Payments) Amendment Bill, it is worthwhile noting the background to this; that is, that the process upon which we have arrived at this position today has been a bit of a mess from the government's viewpoint. There has certainly been much consternation from some stakeholders in relation to how this whole process has been handled and managed.

There was, as the government has indicated, significant discussion and consultation through the early and middle part of this year in relation to the introduction of this bill. The first point to make is that the reason we are having this debate is that some two years or so ago the government and the WorkCover board agreed to get rid of the old bonus penalty scheme which existed with WorkCover. Put simply, the bonus penalty scheme was there to provide some incentive for good performance from employers and business and to penalise poor performance. I think just about everybody supported the fact that a bonus penalty scheme existed within the WorkCover scheme.

For some reason, the government abolished the scheme but did not replace it with an alternative scheme. The government's position, as we understand it—and I guess the government when we get to the committee stage of the debate or in the reply to the second reading can outline the reasons for this—was arguing it was costing the scheme $40 million a year. I think that was their argument. The stakeholders who have spoken to me about it have said that that is essentially a problem for the government and WorkCover because, when the bonus penalty scheme was brought in, it was intended to be, and stated to be, revenue neutral.

The aggregate sum, generally, of the bonuses would be equivalent to the aggregate sum generally of the penalties, so you would have a bonus penalty scheme but, in essence, by and large, it would be revenue neutral on the operation of the scheme. For some reason, and somehow, that did not occur. What the reasons were for that, as I said, we will be asking questions of the government, and we ask the question now: what did happen with the arrangements with the old bonus penalty scheme?

As I said, it is the prerogative of the government and the WorkCover board to get rid of the scheme, but no-one could understand why you would actually get rid of the scheme and not have anything to replace it with. This scheme, I think if it is to be introduced, will not be introduced until mid-2012 so we will have been without some sort of bonus penalty scheme for a period of at least a couple of years.

I think they are reasonable questions that stakeholders are asking; that is, how could we have got ourselves into such a position? We have talked about the range of other calamitous decisions this government and the WorkCover board have taken, such as the monopoly claims manager arrangement; but, at last, it would appear the government and the WorkCover board might have realised the folly of their ways and are in the process of possibly reversing the decision. Their other calamitous decision in relation to savings was they were going to save $30 million through a monopoly legal services provider and, again, it may be that they are in the process of reversing that decision.

To get rid of the bonus penalty scheme and not be in a position to replace it with some incentive-based scheme to encourage good occupational health and safety practice within our worksites in South Australia is part of that package of calamitous decisions. This government, I am sure we will hear, through the Work Health and Safety Bill, likes to pat itself on the back and puff its chest out at the same time saying it is interested in the safety of workers, etc., but, on fundamental issues like this, it drops the ball and leaves our workers and worksites exposed for at least a couple of years without any incentive-based scheme available for WorkCover.

The government went out and consulted on it and most industry groups are generally supportive of the notion of including some sort of bonus penalty scheme. What then happened was that the government approved, together with WorkCover, in essence, sneaking into the bill a whole range of other issues which had not been consulted upon with stakeholders.

The Hon. A. Bressington: How unusual.

The Hon. R.I. LUCAS: The Hon. Ann Bressington says, 'How unusual.' She is aware of this practice by the government and these ministers and, sadly, it was reflected again in this particular bill. I think we are fortunate that the executive officer of the Self Insurers of South Australia (SISA), Robin Shaw, is a former senior executive of WorkCover. He knows where the bodies lie within WorkCover. He knows how the scheme operates. He is aware of the detail of the legislation. He twigged immediately, and I am sure others did as well, what the government and WorkCover were up to. They had consulted widely—which I am sure the government will remind us of during this debate—about a bonus penalty scheme, but then they introduced a whole range of other, onerous provisions, for example, to try to crush the self-insurance industry in South Australia.

They were going to give virtually unlimited powers to the government and to WorkCover to ratchet up the costs for anyone who might want to leave the WorkCover scheme and become a self-insurer. A whole range of other, unspecified costs within WorkCover could be included in the calculations that WorkCover could make when calculating what an exit fee might be for a company wanting to leave and become a self-insurer. What has driven this palpable hatred from the government and from WorkCover towards self-insurers I do not know.

The Hon. T.J. Stephens: It's an ideology.

The Hon. R.I. LUCAS: My colleague the Hon. Mr Stephens says it is ideological, and I suspect he is right. However, a number of us have served on the WorkCover inquiry through the Statutory Authorities Review Committee, and I currently sit on the occupational health and safety standing committee of the parliament, which is taking evidence on return to work, and our return-to-work figures in South Australia are appalling under the WorkCover scheme. They are the worst in the nation.

The Hon. A. Bressington interjecting:

The Hon. R.I. LUCAS: The Hon. Ms Bressington says that I do not listen to the FIVEaa ads. Well, I am suitably admonished; I will go away and listen to them. I am sure the point that the Hon. Ms Bressington is making is that WorkCover is throwing good money after bad, saying how fabulous its scheme is in relation to return to work.

The brutal reality is that inquiry after inquiry, both parliamentary and consultants' inquiries, where we spent hundreds of thousands of dollars, have all reported that we have an appalling record, an appalling performance, in relation to return to work. We have an appalling performance in relation to levy rates and a whole range of other things as well, but let us talk about worker safety and return to work. We have an appalling record, appalling performance, in relation to return to work.

We then have a position where this government—as I said, for whatever reason—says, 'We are going to do whatever we can to prevent anyone going to a self-insurance arrangement,' when the record shows their return-to-work figures are measurably better than under WorkCover. There are a whole variety of reasons why that might be the case, and I am not going to enter the debate at the moment, but there seems to be some pathological hatred from the Labor government and from the WorkCover board and management to the notion of self-insurance.

It has got to the stage at the moment where, even though under previous regimes SISA has been consulted as a stakeholder on a range of things, I am told that they are being deliberately excluded by this government and by WorkCover from a whole range of consultations. That seems ludicrous, but it is symptomatic—

The Hon. J.S.L. Dawkins interjecting:

The Hon. R.I. LUCAS: I am not sure why we would not sit tonight when we are in the last sitting week. The government minister seems desperate to get home and not sit and do the government business. We are here wanting to do government business—

The PRESIDENT: Order! Away we go; I'm ready to go.

The Hon. R.I. LUCAS: You are crying, Mr President; are you alright?

The PRESIDENT: Yes, I'm crying.

The Hon. R.I. LUCAS: It was a moving speech, I know, but I didn't realise it was that moving! I will turn down the emotion, Mr President. Goodness gracious, I have never made a president cry before. You wanted to go home with the government ministers as well, did you, Mr President?

The PRESIDENT: It’s my anniversary, yes.

The Hon. R.I. LUCAS: I have been diverted. What with tears and government ministers wanting to go home and not work tonight, it is very hard for me to keep up with exactly where I was up to.

Highlighting the problems, I am sure I remember the words 'pathological hatred', and I was obviously describing the position of the government towards the self-insurers. There is a whole range of decisions the self-insurers association identified in the bill which had never been consulted upon with either them or indeed other stakeholders. But it was not just in relation to self-insurers. A number of other stakeholders indicated that there were elements in the government bill, when it was first introduced into the House of Assembly, that had not been in the consultation bill which had been put out.

I and other members I am sure started to receive a flood of correspondence from Southern Cross Care, Ingham Enterprises, Yalumba, Intercast & Forge, and the Civil Contractors Federation of South Australia, amongst others, who all in a flurry started contacting the opposition to say, 'Hey, be aware, it's the end of the session, the government is trying to jam this bill through in the last few weeks, and they are trying to jam through a bill that includes provisions which we haven't seen and haven't been consulted on during the drafting stages of the bill.' That is the background to it.

It got to the stage, because of the public campaign that had been mounted primarily by SISA but supported by others, that the government decided that the only way it could get some bill through this session of the parliament was to do an embarrassing backflip, welcome though it may be, and in essence gut the bill of much that was offensive to the Self Insurers of South Australia and a number of the other employer bodies and employer associations in South Australia.

What happened then was that the government asked WorkCover to amend the bill. We have seen an amended bill and, because of the fact that we are close to the end of this parliamentary session, we have seen this amended bill introduced in the Legislative Council first, even though the minister is obviously in the House of Assembly. That is where we started and where we have arrived this evening in terms of the current bill.

It was just over two weeks ago that employer organisations received the latest draft and latest copy of the bill. We immediately contacted all stakeholders who had been in contact with us saying, 'Hey, have a look at this; see what is your response.' As of today—and we are debating this bill on Wednesday evening—I still have not received the response from the organisation that the government believes is the true representative of businesses in South Australia, that is, Business SA. We have been pursuing a response from Business SA for some period of time, and we are told that we will get its view possibly tomorrow or Friday.

We have received some views from other stakeholders, and I intend this evening to put on the record some of the questions they are raising with me; some I have only received in the last 48 hours, raising further questions about the drafting of the bill. Certainly from the Liberal Party's viewpoint I propose this evening, given the lateness of the receipt of the submissions, to put on the record the questions that these business associations and stakeholders are asking of me to ask of the government.

I am hoping that the government tomorrow will be able to bring down a reply to most of those questions and maybe correspond with us by Friday with the rest of the answers, which will then allow certainly the Liberal Party to consider the government's response and then, in the time between now and next Tuesday, when we commence the committee stage of the debate, from our viewpoint look at the potential for drafting any amendments in relation to the bill if amendments need to be drafted.

We note that already the Hon. Dennis Hood, I think, has flagged an amendment. We as a Liberal party room have not had the opportunity to take that to our party room. It will go to the joint party room for us next Monday, together with any other Liberal amendments, if any, that we might propose to move when the committee recommences on Tuesday. I highlight that to the government to indicate that that is the process we are proposing to go through.

Our policy position is that we support bonus penalty schemes, so the notion of having a version of a bonus penalty scheme is something we support. We were critical of the removal of the last one, and we therefore support a proposition that it be replaced with something—and that, indeed, was our policy in the 2010 election. We are now in a position of receiving further questions from stakeholders about both the operation of the scheme and also some other elements in the bill they want us to clarify as well.

In one case, the Australian Industry Group has had long discussions with WorkCover, and it has been given certain assurances by WorkCover, and WorkCover has indicated that the minister will give certain assurances on behalf of the government in the house and publicly. Nevertheless, the Australian Industry Group has sought for me to raise those issues with the minister and to see whether the same assurances are given publicly that the Australian Industry Group had been given privately by WorkCover management, I think it was, last Friday.

The only other general point I make before going through the individual submissions is that a consistent theme from all the industry associations so far is that they do not believe the bill is actually required. They have argued that the old bonus penalty scheme existed without its being specifically provided for in legislation. Their legal advice is that the government could replace the bonus penalty scheme with this scheme without needing legislation to be rushed through the house.

The government's position is that it argues against that and believes that it does require legislation. Nevertheless, it is a government policy decision that it should be included in legislation. From the Liberal Party's viewpoint, we do not object to that; the general principle of having it in legislation is not something we are opposed to, although stakeholders have acknowledged that the old scheme existed without it being specifically provided for in legislation. With those words, I seek leave to conclude my remarks.

Leave granted; debate adjourned.